Communication having trouble since the beginning of June until now is Network has officially filed for bankruptcy.

filed for bankruptcy

Celsius Network, a lending/borrowing company has had a liquidity crisis since the beginning of June, has filed for bankruptcy in the New York court (USA).

Documents submitted to the court show that Celsius proactively declared Chapter 11 bankruptcy, allowing the company to continue operating during debt restructuring and prioritizing the interests of creditors above users. The amount of assets declared by the company in the filing is between $1 and $10 billion — of which only $167 million is in cash, with debt levels also in this range.

The company disclosed that it has more than 100,000 creditors, with the largest institutions including Pharos USD Fund SP/Pharos Fund S, , ICB Solutions, The Caen Group LLC, , B2C2, Covario AG and individual users.

As of May 2022, Celsius is said to be one of the units biggest in the industry , managing deposit assets of up to 12 billion USD and lending more than 8 billion USD, supporting a total of 1.7 million customers.

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This is the third crypto company to declare bankruptcy in July 2022, after the investment fund Three Arrows Capital (July 2) and the investment application Voyager Digital (July 6). All three filed for bankruptcy in New York court.

Celsius is the first lending platform to enter the “liquidity crisis” that is negatively affecting the entire cryptocurrency market.

The reason Celsius is having trouble stems from the fact that they convert the majority of user deposits to stETH – the lock token back on Finance, which has poor liquidity. When the crypto market violently corrected in early June, coupled with the sharp drop in the price of stETH, Celsius was massively withdrawn by users and had to block all transactions/deposits/withdrawals since June 13.

During the period after that, Celsius provided very little information on the current situation, only stating that it still needed more time to stabilize liquidity and asking users to be patient. Rumors swirled around the incident as the company's CEO was about to flee the US, Celsius was refused to rescue because it was allegedly "losing $2 billion"; company shareholders put pressure; or the latest is Celsius being sued by his former partner, accused of being a "ponzi" and revealing the loss of customers' money when investing, making things worse.

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The company is said to have hired many legal advisors to conduct operational restructuring and consider the possibility of bankruptcy. At the same time, the company was also scrutinized by legal authorities in many US states to investigate the wrongdoing that led to the current collapse.

Since the beginning of July, Celsius has returned about 800 million USD borrowed from protocols to be , MakerDAO và Compound. Đổi lại, công ty đã rút 440 triệu USD WBTC thế chấp từ Maker, 124 triệu USD WBTC và 417 triệu USD from and the latest is about 200 million USD WBTC from Compound.

Data from shows that Celsius has transferred most of the above collateral to major exchanges such as , high ability to sell to pay debts and rebalance the asset statement for the bankruptcy process.

Celsius's CEL token price dropped by nearly 45% after the company's bankruptcy news was announced.

1H chart of CEL/USD pair on FTX at 08:58 AM on 14/07/2022

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